Financial Aid Office
Location: CC - 257
IHCC School Code: 006935
Financial Literacy / Money Management
Financial literacy is the capacity to make good decisions when managing your personal finances. The tools below can help you develop financial freedom, so you can spend your money on what you choose without going into debt.
A budget, or spending plan, is your first step in managing your money. The following are some helpful budgeting website to get you started:
- Finaid.org has a variety of calculators to help you determine how much school will cost, how much you need to save, and how much financial aid you will need.
- SmartAboutMoney.org provides tools to manage your money now and in the future.
- Financial Literacy-Federal Student Aid offers information on paying for education,responsible credit card usage, fraud prevention, and consumer protection rights.
We encourage students to keep their loan debt to a minimum when financing their education. If you need to borrow to cover educations expenses, be sure to determine what you actually need to borrow before you sign for that loan. Remember, any loan listed on your award letter indicates the maximum allowable that you can borrow; you can always borrow less. The following are some helpful tips about borrowing:
- When paying for your education, the main goal should be to keep your debt to a minimum, so only borrow what you need. To calculate what you need, use one of the budgeting websites listed above or the Minnesota Office of Higher Education's Financial Aid Estimator.
- Keep a record of all your loans and your Master Promissory Note.
- Start making payments on your loan as soon as you can, even during school if possible.
- Notify your lender or servicer if any of your contact information changes.
- If you are unable to make your monthly payment, contact your lender immediately for assistance.
- Before borrowing, you can determine what your loan repayment would by using a Loan Repayment Calculator.
Upon ceasing enrollment including being in less than 6 credits or graduating and prior to beginning repayment, you will be required to complete an exit counseling session if you have received a
- Subsidized/Unsubsidized Stafford
- Minnesota Self Loan
To determine how much in loans you have received, you can use the National Student Loan Data System (NSLDS) to track your funds.
There are several ways to complete the exit counseling requirement:
- Online exit counseling is available on the website of the National Student Loan Data System (NSLDS): Exit Counseling. Follow the instructions to complete the exit counseling process.
You do not need to notify the Financial Aid Office upon completion of your exit counseling requirement. However, you are welcome to contact our office with any follow-up questions. Call 651-450-3495 or e-mail email@example.com.
For questions about your individual student loans, you should contact your lender or the current holder of your loan. To determine the holder of your loan, you should consult the National Student Loan Data System (NSLDS).
If you encounter difficulties with your lender, you may wish to contact the U.S. Department of Education’s Federal Student Aid Ombudsman. The Ombudsman provides borrowers with information and guidance to resolve concerns about their student loans. As an advocate, the Ombudsman can research problems and determine if you have been treated fairly. Here is the contact information for the Ombudsman’s office:
If you plan to re-enroll at Inver Hills Community College or another college or university, please notify your lender. You may need to complete an in-school deferment request to postpone repayment. You should continue to make monthly payments until you are officially notified of approval of your deferment request
Repayment Plans and Calculators
(information applies to Direct, Direct PLUS)
You will be automatically enrolled into the Standard Repayment by your loan servicer. However, you have the right to decide if you wish to use the Standard Repayment plan or select a different plan. Plans range from 10 to 25 years to repay your loan, depending on which repayment plan you choose.
With the standard plan, you'll pay a fixed amount each month until your loans are paid in full. Your monthly payments will be at minimum $50, and you'll have up to 10 years to repay your loans.
Your monthly payment under the standard plan may be higher than it would be under the other plans because your loans will be repaid in the shortest time. For that reason, having a 10-year limit on repayment, you may pay the least interest.
Under the extended plan, you'll pay a fixed annual or graduated repayment amount over a period not to exceed 25 years. If you're a Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans. Your fixed monthly payment is lower than it would be under the Standard Plan, but you'll ultimately pay more for your loan because of the interest that accumulates during the longer repayment period.
With this plan, your payments start out low and increase every two years. The length of your repayment period will be up to ten years. This plan is an option for people that expect their income to increase steadily over time. Your monthly payment will never be less than the amount of interest that accrues between payments. Although your monthly payment will gradually increase, no single payment under this plan will be more than three times greater than any other payment.
Income Contingent Repayment (ICR) (Direct Loans Only)
Under ICR, your monthly payments will be calculated yearly on the basis of your adjusted gross income (AGI, plus your spouse's income if you're married), family size, and the total amount of your Direct Loans. Under the ICR plan you will pay each month the lesser of:
- The amount you would pay if you repaid your loan in 12 years multiplied by an income percentage factor that varies with your annual income, or
- 20 percent of your monthly discretionary income.
If your payments are not large enough to cover the interest that has accumulated on your loans, the unpaid amount will be capitalized once each year. However, capitalization will not exceed 10 percent of the original amount you owed when you entered repayment. Interest will continue to accumulate but will no longer be capitalized (added to the loan principal).
The maximum repayment period is 25 years. If you haven't fully repaid your loans after 25 years (time spent in deferment or forbearance does not count) under this plan, the unpaid portion will be discharged. You may, however, have to pay taxes on the amount that is discharged.
Note: Parent Direct PLUS Loan borrowers are not eligible for the ICR repayment plan.
Income Based Repayment (IBR)
Income-based repayment is like income contingent repayment, but caps the monthly payments at a lower percentage of a narrower definition of discretionary income. IBR caps your required monthly payments on the major types of federal student loans at an amount intended to be affordable based on income and family size. All Stafford, PLUS, and Consolidation Loans made under either the Direct Loan or Federal Family Education Loan programs are eligible to be included in the program. Loans currently in default and Parent PLUS Loans are not eligible for the income-based repayment plan. The program lowers monthly payments for borrowers who have high loan debt and modest incomes, but it may increase the length of the loan repayment period, accruing more interest over the life of the loan. You must also reapply for IBR each year to verify that you qualify and to determine your repayment amount.
Pay as you Earn
The Pay As You Earn Repayment Plan helps keep your monthly student loan payments affordable, and usually has the lowest monthly payment amount of the repayment plans that are based on your income. If you need to make lower monthly payments, this plan may be for you.
As of Dec. 21, 2012, the Pay As You Earn plan is available for eligible borrowers.
To qualify for Pay As You Earn, you must have a partial financial hardship. You have a partial financial hardship if the monthly amount you would be required to pay on your eligible federal student loans under a 10-year Standard Repayment Plan is higher than the monthly amount you would be required to repay under Pay As You Earn. For this purpose, your eligible student loans include all of your William D. Ford Federal Direct Loan (Direct Loan) Program loans that are eligible for Pay As You Earn, as well as certain types of Federal Family Education Loan (FFEL) Program loans. Although your FFEL Program loans cannot be repaid under Pay As You Earn, the following types of FFEL Program loans are counted in determining whether you have a partial financial hardship:
- Subsidized and Unsubsidized Federal Stafford Loans
- Federal PLUS Loans made to graduate or professional students
- Federal Consolidation Loans that did not repay any PLUS loans for parents
You also must be a new borrower as of Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011. You are a new borrower if you had no outstanding balance on a Direct Loan or FFEL Program loan as of Oct. 1, 2007, or had no outstanding balance on a Direct Loan or FFEL Program loan when you received a new loan on or after Oct. 1, 2007.
Your payment amount may increase or decrease each year based on your income and family size. Once you’ve initially qualified for Pay As You Earn, you may continue to make payments under the plan even if you no longer have a partial financial hardship.
Average Loan Debt for Inver Hills student
$8,866.00 is the average loan debt amount Inver Hills students accumulate in 2 years.
There are several tools available that will help you compute the estimated payments on your loans.
As you make plans for repaying your student loans, you may be considering loan consolidation as an option. Consolidation allows you to pay off some or all of your existing student loans by combining them into a single, large loan. There are two types of consolidation programs for education loans:
Federal Consolidation Loans
- For Direct loan program
- Parents able to consolidate Parent PLUS Loans. Parent and Student loans cannot be combined in consolidation.
- The interest rate on a consolidation loan is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest 1/8 of a percent and capped at 8.25%.
- Deferment options predetermined by federal regulations
- Cannot include non-federal (private) loan funds
- No fees to consolidate your federal loans
Loan consolidation may lower your total monthly repayment amount. However, any consolidation loan is also likely to significantly increase the total amount of interest that you will be required to pay. You may also lose any remaining grace period on your consolidated loans. If you are able to meet your current monthly repayment obligations, it may be best for you to avoid consolidation.
You may want to estimate the amount that you can afford to pay on a federal consolidation loan based on your monthly income, using the U.S. Department of Education’s Online Calculator. Additional information about consolidation can be found on the Department of Education’s website for Loan Consolidation.
Information about private loan consolidation can be located at Finaid.org.
Loan Defaults and Disputes
Resolving Loan Repayment Disputes
If you are having a dispute with your servicer or another agency regarding repayment of your federal student loan, you may consider contacting the Federal Student Aid Ombudsman for assistance. You can reach the Ombudsman's office by phone at 877-557-2575 or by mail at this address:
U.S. Department of Education
830 First Street, NE
Washington, DC 20202-5144